Specification and Estimation of Rating Scale Models – with an Application to the Determinants of Life Satisfaction∗

This article proposes a new class of rating scale models, which merges advantages and overcomes shortcomings of the traditional linear and ordered latent regression models. Both parametric and semi-parametric estimation is considered. The insights of an empirical application to satisfaction data are threefold. First, the methods are easily implementable in standard statistical software. Second, the non-linear model allows for flexible marginal effects, and predicted means respect the boundaries of the dependent variable. Third, average marginal effects are similar to ordinary least squares estimates.